January 2024 FOMC Debrief

Hello my friends and welcome to my January FOMC debrief. In a word this FOMC was without question hawkish but before we get into what happened let's level set a little bit. So the last meeting we had was the December FOMC and that meeting was Dovish. It was Dovish because it was at that time that Chirpal clearly signaled that rates were as high as they were going to go and the next move would be a cut.

大家好，朋友们，欢迎来到我的一月份美联储公开市场委员会（FOMC）总结。总而言之，这次FOMC无疑是鹰派的，但在我们深入讨论发生了什么之前，让我们先进行一些基本了解。所以，我们上次的会议是在十二月份的FOMC，那次会议是鸽派的。会议之所以鸽派，是因为那时刻夏普尔清楚地表示利率已经达到了它们的峰值，下一步将是降息。

Now since then risk assets arrived a lot and the markets had priced in a very aggressive rate cut cycle. Heading into the meeting today markets were thinking as many as six cuts this year and not without reason either. So the data of the past few weeks has been decisively soft landing. So GDP continues to grow above trend, unemployment remains low and most importantly inflation core PCE which is the Fed's favorite measure of inflation has been bang on at 2% for six months.

自从那时以来，风险资产大量涌现，市场已经将非常激进的降息周期计价进去了。在今天的会议之前，市场预计今年可能会进行多达六次降息，并且这个预期也不是没有道理。所以过去几周的数据明显表明经济在软着陆。因此，国内生产总值继续保持高于趋势增长，失业率保持低位，最重要的是，核心个人消费支出物价指数（美联储最喜欢的通胀衡量指标）连续六个月稳定在2%。

So in addition to that we've had a number of Fed speakers over the past few weeks come out and talk about how they look at the world through the lens of real interest rates which is nominal minus expected inflation. So as inflation is right on target as growth continues to be solid many anticipated including myself that the Fed would begin to gradually cut rates to make sure that they don't over tighten. They don't to make sure that real rates don't continue to rise as inflation expectations decline.

因此，除了这一点，我们过去几周还有许多美联储发言人出来谈论他们是如何通过实际利率的视角来看待世界的，实际利率是名义利率减去预期通胀率。因此，既然通胀率正好符合目标，经济增长仍然稳固，许多人包括我自己都预期美联储将开始逐渐降息，以确保他们不会加息过度。他们要确保实际利率不会继续上升，同时预期通胀率也在下降。

So that brings us into the meeting today. Now the first point as to why the meeting I think the meeting was hawkish was that Chirpal unequivocally pushed back against a March rate cut. Let's listen to what he said. We're going to be data dependent. We're going to be looking at this meeting by meeting. Based on the meeting today I would tell you that I don't think it's likely that the committee will reach a level of confidence by the time of the March meeting to identify March as the time to do that but that's to be seen.

所以这就引领我们进入今天的会议。我认为会议为何表现强势的第一个原因是奇尔帕尔毫不含糊地反对3月降息。让我们听听他说了什么。我们要依赖数据。我们会每次会议都进行评估。根据今天的会议，我告诉你，我不认为委员会在3月份会议之前能够达到足够的信心来确定降息的时间，但这还有待观察。

So I wouldn't call it you know when you say when you ask me about in the near term I'm hearing that as March I would say I don't think that's probably not the most likely case or what we would call the base case. So central bankers are you know our bunch that don't really give you straight answers. What you just saw was a straight an answer as you ever get from a central baker saying that there's no way I'm going to cut in March.

所以我不会这样说——你知道当你问我关于近期时，我理解为三月。我认为这可能不是最有可能发生的情况，或者我们所称的基准案例。所以中央银行家们往往不会给出直接的答案。你刚才听到的是一位中央银行家所能给出的最直接的回答，即三月不可能会降息。

Now I think many people in the press core found this to be strange because by all accounts it seemed like inflation was already under control as we discussed earlier. Core PC has been at 2% for six months and Chirpal acknowledged this. He acknowledged that the data has been good but he wants more good data. So six months is not enough for Chirpal maybe seven months maybe eight months. I'm not sure many people ask him about that but it seems my sense is that he is basically keeping the doves at bay and he really wants to make sure that they don't embark upon an easing cycle too soon otherwise you might have inflation re-accelerate which is exactly what happened in the 1970s the last time we've had an inflation problem.

现在我认为，新闻界的许多人都觉得这很奇怪，因为按照一切迹象来看，通胀似乎已经得到了控制，正如我们之前讨论的那样。核心个人消费物价指数（Core PC）在过去六个月里保持在2%的水平，Chirpal承认了这一点。他承认数据是好的，但他希望有更多好的数据。所以六个月对于Chirpal来说可能还不够，也许要七个月，也许要八个月。我不确定是否有许多人向他询问过这个问题，但我觉得他基本上是在阻止鸽派行动，他真的希望确保他们不会过早地采取宽松政策，否则通胀可能会重新加剧，这正是上次我们遇到通胀问题时发生的情况（1970年代）。

Now my guess is that he understands that once he starts cutting the market is going to take that and run with it and going to continue to price even more aggressive rate cuts. So he seems to try to be holding interest rates as high as he can for as long as he can but I don't think it's really going to matter. What simply happens is that the market will start pricing in May cuts to higher degrees and simply just push the cutting cycle forward a little bit. So I'm not sure if a couple months really matters all that much but in any case I think the markets saw that the Chirpal is not cutting in March interpreted that as hawkish and reacted accordingly. So you saw stock sell off and we saw interest rates rise a bit above the curve.

我猜测他现在明白，一旦他开始削减市场，市场将利用这一点并继续进一步推动更激进的降息。所以他似乎尽可能保持利率高，并尽可能长时间保持，但我认为这并不重要。简单来说，市场将开始将5月份的降息程度定得更高，并将削减周期向前推进一点。所以我不确定几个月是否真的有那么大影响，但无论如何，我认为市场看到了奇尔帕尔不会在三月份削减，将其解读为鹰派，并做出了相应的反应。所以你会看到股票抛售，我们也看到利率稍微超过了曲线。

Okay that's the first thing. Now the second thing that I thought was hawkish was less obviously so and it has to do with the discussion on tapering quantitative tightening. So as we all know the Fed is shrinking its balance sheet. From the Fed minutes we also learned that the Fed is talking about tapering QT that is to say slowing down the pace that it shrinks its balance sheet. Now many market people make market observers were listening to this and thinking that you know maybe this Fed might stop QT very soon.

好，这是第一件事。接下来我认为鹰派的第二件事可能不容易察觉，它与量化收缩的讨论有关。正如我们都知道的那样，美联储正在缩减其资产负债表。根据联邦储备会议记录，我们还了解到美联储正在讨论减少量化收紧，即减缓其缩减资产负债表的速度。现在许多市场人士和观察者听到这个消息时可能会认为，美联储可能会很快停止减少资产负债表。

Over the past few weeks we've had a number of Fed speakers come and present their viewpoint as to when they should taper and I have written about this. One Fed speaker thought that they should taper when the RFP balances are very low and if you look at the RFP balances they've been declining very aggressively over the past few months. Initially let's say last June there were above 2 trillion now there about 600 billion and so there were some people on the street who were thinking that you know if the Fed starts tapering QT when the RFP is low that could mean a taper as soon as March.

在过去几周里，我们已经有多位美联储发言人就何时开始缩减购债规模表达了他们的观点，我也写过相关报道。其中一位美联储发言人认为，当回购协议(FRP)余额非常低的时候，他们应该开始缩减购债规模，而如果你看一下回购协议余额，你会发现在过去几个月里它们一直在大幅下降。假设最初说的是去年6月份时回购协议余额还在2万亿以上，而现在已经降至约6000亿左右，因此有些人认为，如果美联储在回购协议余额低的时候开始缩减购债规模，那可能意味着最早在3月份就会开始缩减。

But that doesn't seem to be the case. So Chair Powell said that yeah we talked about shrinking the balance sheet this past meeting but for the really big discussion we're going to have that in March and from my perspective if you're having a really big discussion in March you're probably not going to be implementing it at the same meeting. So again my own view is that QT taper won't start until quarter four of this year but to the extent that there were some people on the street thinking that you would taper in March that has to be pushed up further out into the future and so on the margins I think that's also a bit hawkish as well.

但事实似乎并非如此。所以，鲍威尔主席表示，是的，我们在上次会议上讨论了缩减资产负债表的问题，但真正重要的讨论将在三月份进行，从我的角度来看，如果你在三月份进行了一次真正重要的讨论，那么在同一次会议上很可能不会实施。所以我的个人观点是，缩减资产负债表的过渡期将不会开始到今年第四季度，但在某种程度上，如果有人认为缩减将在三月份开始，那么他们必须进一步将其推迟到未来，所以在一些方面来说，我认为这也是有点鹰派的。

Now going forward the sets up the March meeting to be a really important meeting. It's going to be important in two ways. First now Chair Powell acknowledged during the press conference that inflation has come down faster than expected. So by that logic then we could actually see the Fed's dot plot in March have more than the three cuts this year that were guided towards in December. So the dot plot can be more davish in March than it is in December because inflation has been progressing faster. Progressing towards two percent faster than expected.

现在前进，3月份的会议将成为一个非常重要的会议。这会议在两个方面是重要的。首先，鲍威尔主席在新闻发布会上承认通胀下降速度快于预期。所以按照这个逻辑，我们可以看到3月份美联储的点值图可能会比12月份更加鸽派，因为通胀进展得比预期快，这表示在今年可能会有超过3次降息。通胀的进展速度会更接近2%。

And secondly of course we're going to have a lot more to discuss about quantitative the tapering of QT. So we could either have that at the press conference or more details could be leaked in the minutes of the March FOMC meeting. So that's definitely something to look towards in a few weeks and I will be back then to talk about it and that's why I prepared and we'll be back this weekend with Markets Weekly.

当然，第二个要讨论的当然是关于量化宽松退出的更多内容。这个问题在新闻发布会上可以讨论，或者在三月FOMC会议的纪要中可以找到更多细节。所以在未来几周中，这绝对是我们要关注的事情，我会回来谈论这个问题，这也是为什么我做了准备并且会在本周末带来《市场周报》的原因。

Well we'll talk about the QRA and other stuff as well. All right talk to you all later.

好的，我们会讨论有关QRA和其他事情。好了，稍后再和大家交谈。